Investing.com – The dollar rose against a basket of major currencies on Thursday as a raft of upbeat data fuelled investor optimism of solid U.S. economic growth ahead of a crucial nonfarm payrolls report due Friday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.51% to 93.79.
In what was a busy day on the economic calendar for top-tier data investors cheered upbeat initial jobless claims and trade balance data pointing to strength in the U.S. economy.
The U.S. Department of Labor reported Thursday that initial jobless claims fell 12,000 to a seasonally adjusted 60,000 for the week ended Sept. 30, beating forecasts of a 7,000 decline.
The trade deficit — which measures the gap between what the United States imports and what it exports — narrowed to $42.4 billion in August, down $1.2 billion from July. Exports in the August were $195.3 billion, while imports came to $237.7 billion.
The duo of reports come ahead of a nonfarm payrolls update due Friday, expected to show the U.S. economy created 90,000 jobs in September. It is the first time since December 2012 that economists’ forecasts for job creation fell below 100,000 amid concerns that Hurricanes Harvey and Irma disrupted labour market activity.
The Federal Reserve closely monitors both labor market growth and the pace of inflation when it considers monetary policy decisions. The Federal Reserve signalled at its previous policy meeting that the majority of its members support an additional rate hike this year.
San Francisco Fed President John Williams said Wednesday he does not need to see inflation move higher to support another interest rate increase this year as long as other economic data points to continued economic strength.
The move higher in the dollar weighed on both the sterling and the euro, with latter under pressure following the release of somewhat dovish ECB minutes of the September meeting.
GBP/USD fell to $1.3130, down 0.85%, while EUR/USD dipped 0.45% to $1.1708.
USD/JPY rose 0.02% to Y112.77 while USD/CAD added 0.75% to C$1.2571. The Canadian dollar softened amid data showing the trade deficit widened August.